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Government agrees to carry out defense procurement through Prozorro system

by Martin Fornusek and The Kyiv Independent news desk February 2, 2024 9:38 AM 3 min read
DJI Matrice 300 reconnaissance drones, bought through the 'Army of Drones' program, are seen during test flights in the Kyiv region on Aug. 2, 2022, prior to being sent to the front line. (Sergei Supinsky/AFP via Getty Images)
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The government approved on Feb. 1 a resolution to process defense procurement in the competitive procedure of the Prozorro system, among other steps aimed at improving the efficiency of defense production.

Prozorro is Ukraine's electronic public procurement system, designed to increase transparency and competition in the bidding process.

Launched in 2016, it is designed to streamline the process for companies to participate in bids and track the entire procurement process electronically, helping to reduce corruption and improve efficiency.

"This solves several issues at the same time. Firstly, we can guarantee continuous, stable, and manageable supplies for our military," said Prime Minister Denys Shmyhal during a governmental meeting on Feb. 1.

"Secondly, we establish transparent pricing, making sure that the state doesn't overpay and businesses make a profit. Thirdly, we are installing safeguards to prevent leaks of sensitive information."

The government approved two additional resolutions related to the defense sector. One was aimed at the deregulation of ammunition production for drones by "improving the procedure for registering manufacturers."

Minister: Ukraine cannot outproduce Russia, needs to focus on advanced technology
With over $100 billion in U.S. and EU aid stalled over political disputes, Kyiv has been focusing on revitalizing the domestic industry, aiming to build up a homemade arsenal of drones and missiles.

"New businesses will be able to get up and running quickly. In this way, we will strengthen our army in the shortest possible time," Shmyhal said.

Expanding on a project launched last summer, the government hopes to expand the list of potential manufacturers while cutting down the red tape.

"In six months, over 10 manufacturers were registered, more than 20 ammunition types were put into operation, and another 30 are at various stages of testing," the prime minister noted.

The third resolution concerns drone production pricing. According to the motion, manufacturers should now clarify price calculations if their profit exceeds 25%.

Several top Ukrainian officials underscored the importance of drones in the full-scale war with Russia.

Strategic Industries Minister Oleksandr Kamyshin noted the favorable "cost to kill" ratio of drones compared to other, more expensive systems, like missiles.

President Volodymyr Zelensky said on Jan. 29 that surpassing Russia in drone production is one of the main tasks for 2024. He also previously revealed that Ukraine aims to produce 1 million drones this year.

According to Kamyshin, Ukraine produced 50,000 first-person-view (FPV) drones in December 2023. He also added that the country aims to massively scale up its production of drones to tens of thousands per month.

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